Business Cycles

"Real GDP has nothing to do with the real world."

Popular rhetoric notwithstanding, government cannot be run like a business.

Securitization is a financial technique that permits the exchange of relatively nonmarketable credit claims for liquidities.

Nevertheless, if we wish to save the capitalist system (or perhaps, to reinstate it), we must reexamine what made this system so successful in the first place, as well as which forces constitute the greatest threats to its existence.

These changes do not affect at the same time and to the same extent the prices of the various commodities and services. They consequently affect the wealth of the various members of society in different ways.

It makes no sense to say that the major dislocations of the world's economies in the 1930s could have been solved simply by printing up pieces of paper.

Today, the main response to ill-effects of past interventions seems to be to create even greater ones.

We know what these measures do. They delay economic adjustment and recovery; they extend economic hardship, regardless of whether we call the hard times a depression or a "great recession."

The root of the current financial crisis was an artificially induced boom in the real economy, and asset-price markets that subsequently turned to bust. The bust led to a reduction in the values of many assets owned by banks.

Pages 573-583. Narrated by Jeff Riggenbach.